AUD: All show but no substance!

From the FXWW Chatroom: That is the conclusion one can draw from the Australian labour market for April. “Unchanged unemployment rate at 5.7% and almost 11,000 new jobs” initially sounds positive. However, further full-time positions have been lost and been replaced by part-time positions and the participation rate has fallen. A reason for RBA to cut the key rate soon? I do not think so, as it made it clear in April that it expects a slightly weaker labour market over the coming months. Of course it will maintain its cautious approach, but a little more bad news would be required for a further rate cut – in particular on the inflation front. AUD is nonetheless powerless against USD at present, as USD is benefitting too notably from the hawkish Fed minutes. Moreover the commodities rally seems to be over again. As a result AUD is in a tight spot. [Commerzbank]

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